(TCO E)
Johnson Manufacturing is a publicly held corporation that burns coal to power its plant. Johnson's received notice today of an immediate rule change by the EPA requiring all coal burning plants to reduce their emissions by 10%. Implementing the technology to comply with this regulation would cost Johnson's millions of dollars and could put them out of business. The CEO knows that the current emissions standards have been proven safe and acceptable but cannot find any research supporting the new standard.
1.TCO A. Identify and apply an ethical theory from chapter 8 of our text that you think is appropriate and explain how you would advise the CEO regarding whether or not he should comply with the new standard. (15 points)
2.TCO B. The CEO is upset that no prior notice was given concerning this rule change. As legal counsel for the company, the CEO has asked you to determine if it is legal for the EPA (or any administrative agency) to issue an immediate rule change. Explain why or why not. (15 points)
3.TCO F. The CEO wants to approach the EPA with an alternative way of reducing pollution. He asks you if emission charges and/or marketable discharge permits would be viable options. Explain how these could potentially reduce emissions and evaluate whether or not one or both could be used instead of the regulation the EPA passed. (15 points)
4.TCO H. Several years ago, the Board of Directors at the request of management voted against complying with a previous EPA rule change. This decision ended up costing the company $2 million in fines and penalties. Both management and the board are considering not complying with today's rule change. Apply the business judgment rule as it relates to the board of directors and management. Include their legal and ethical responsibilities in the assessment. (15 points)